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Speaking at the Atlantic Council yesterday, President Mikheil Saakashvili outlined his vision for Georgia’s future. Listening to it, I was struck by similarities to the approach that Cyprus took after the 1974 invasion and occupation of the northern third of the island and Saakashvili’s handling of South Ossetia and Abkhazia after the 2008 Russian invasion.

The Cypriot government focused on economic development and growth in the years after the forcible partition of the island. The first step was resettling refugees (rather than keeping them penned up in camps) and ensuring their integration in other regions of the country. At no point did they argue that this approach abrogated the right of the internally-displaced people to return to their original homes and property, but the government decided that warehousing them in order to argue for a right of return would produce more ills than good.

The second step was to make the Republic of Cyprus an attractive place for investment. Certainly, this effort was helped by the Lebanese civil war which caused much of the banking and financial industry of the Middle East to find safer pastures than war-torn Beirut, but the ability of the government to push through the necessary laws and regulations that would give investors the security needed to conduct business and to trust the banking and legal systems helped propel the island’s economic development. In two decades, Cyprus moved from being a less-developed eastern Mediterranean state to becoming a candidate for European Union membership and today is in fact a "donor" country to the Union, contributing more than it takes from EU development and assistance funds.

As Cyprus’ EU prospects loomed, the climate on the island changed. A conflict that appeared to be frozen for all eternity thawed. Attempts to find a final political settlement made progress, and while success has remained elusive, the barriers that divided the island have lifted and there is movement of people and goods across the lines that were once as strictly policed as the Berlin Wall.

President Saakashvili described the efforts of his government to push through reforms that will transform Georgian society and lead to sustained economic growth. As this occurs, he is confident that the "demonstration effect" of an increasingly prosperous and modernized Georgian state may change the dynamics with regards to Abkhazia and South Ossetia. Moreover, a Georgia that continues to promote reform and enjoys high economic growth rates becomes more attractive to those in the Atlantic community who are skeptical of Georgia’s inclusion.

Earlier this year, I talked about a "pause" in Ukraine, arguing it needed breathing room for renewed economic development. Substitute Georgia for Ukraine, and the passage works just as well:

[Georgia] needs a period of peace and quiet where its economy can recover and grow. The only chance [Tbilisi] has for making the case that its future lies in Europe is to show that [Georgia] would not be a net consumer of increasingly scare economic and security resources. It is not just a matter of breaking through the German-Russian partnership to convince a skeptical leadership in Berlin, it is also convincing states like Spain, Portugal, and Italy that further expansion to the east benefits the countries that comprise the southern tier of Europe. For this to happen, "Georgia" and "crisis" have to become words increasingly separated in the minds of existing EU and NATO member states.

Reorienting Georgia’s economic direction is important. Turkey, Azerbaijan and Ukraine are the country’s three largest trading partners. Increasing trade and business ties to Europe, however, is critical. In the past, I have floated the idea of Ukraine becoming part of EFTA— and through that pulling closer to the EU. Is EFTA membership possibly in the cards for Georgia? Unlike EU membership, which is a long-distance affairs, EFTA is something that might be achievable within a shorter timeframe, and certainly something that the Saakashvili administration might be able to lay the ground for in what is left of his second term.

Finally, Georgia will need to stay focused on development. With unemployment still high (over 16 percent), keeping the motor of economic growth active is critical. The temptation to divert the golden stream of revenue that recent advances in growth have generated to major increases in defense spending must also be resisted.

Some may argue that the unresolved tensions with Russia preclude this approach. But South Korea has become an economic powerhouse even with its capital well within range of North Korean artillery that could raze it to the ground. Cyprus raised itself to become a developed European state with its capital literally divided. What we heard yesterday suggests that Georgia may want to emulate the South Korean and Cypriot miracles.

Nikolas K. Gvosdev [email], an Atlantic Council contributing editor, is on the faculty of the U.S. Naval War College. The views expressed are his own and do not reflect those of the Navy or the U.S. government.

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